What Happened To New Age Eats & Why Did It Fail?

New Age Eats, founded in 2018, aimed to revolutionize meat production by creating cultivated pork using biotechnology. Despite raising $32 million and developing innovative technology, the company faced insurmountable financial and regulatory challenges, leading to its closure in 2023.

What Was New Age Eats?

New Age Eats specialized in cultivated pork, aiming to produce meat without slaughter through advanced biotechnology. Their unique value proposition was creating ethical, sustainable meat alternatives. Notable achievements include raising $32 million, developing a near-complete pilot facility, and creating proprietary technology that will benefit future ventures in ethical meat production.

What Happened to New Age Eats?

The story of New Age Eats is a compelling tale of innovation, ambition, and the harsh realities of the startup world:

• Founding and Early Success: New Age Eats was founded in 2018 by Brian Spears with the mission to revolutionize meat production through biotechnology. The company raised $25 million in a Series A round in 2021, led by Hanwha Solutions, bringing its total funding to $32 million.
• Technological Advancements: The startup developed cutting-edge technology to create cultivated pork, aiming to produce meat without slaughter. This innovation borrowed techniques from human health applications, flipping biotech from high-cost, low-volume products to low-cost, high-volume products.
• Financial Challenges: Despite its technological strides, New Age Eats struggled to secure further investment amidst recent capital market turmoil. The inability to attract new funding forced the company to let go of its nearly complete pilot manufacturing facility in Alameda, California.
• Regulatory Hurdles: Operating in a highly regulated industry, New Age Eats faced significant delays in bringing its product to market. These regulatory constraints meant the company couldn't generate revenue, making it heavily reliant on external capital.
• Market Competition and Closure: The competitive landscape, coupled with investor and consumer fatigue in the plant-based and cell-based meat sectors, added to the company's woes. Ultimately, Brian Spears announced the painful decision to shut down New Age Eats, reflecting on the lack of a clear blueprint for developing and commercializing cultivated meat.

When Did New Age Eats Shut Down?

New Age Eats officially announced its shutdown in mid to late March 2023. The decision was driven by the inability to secure additional funding amidst recent capital market turmoil and regulatory hurdles that prevented the company from generating revenue.

Why Did New Age Eats Shut Down?

1. Regulatory Hurdles:

   New Age Eats faced significant regulatory challenges that prevented them from bringing their products to market. Founder Brian Spears noted, "In our regulated industry, we can’t and won’t be able to sell for a while. Without revenue, we rely on other sources of capital." This lack of revenue was a critical factor in their inability to sustain operations.

2. Capital Market Turmoil:

   The recent turmoil in capital markets made it difficult for New Age Eats to attract the necessary investment to continue operations. Spears highlighted this issue, stating, "With recent capital market turmoil, we have been unable to attract investment." This financial instability was a major contributor to the company's closure.

3. High Costs and Time Requirements:

   Developing and commercializing cultivated meat required significant time and patient capital. Spears explained, "Creating the experience of meat without slaughter is extremely difficult. We worked to flip to low-cost, high-volume products. That is expensive, takes time, and needs a lot of patient capital." The high costs and long timelines were unsustainable for the startup.

4. Unfavorable Asset-to-Liability Ratio:

   New Age Eats struggled with an unfavorable ratio of assets to liabilities, making it difficult to find a buyer for the business. Spears mentioned, "We’ve spoken to many companies about acquiring the entire company, but ultimately those conversations were not successful given the ratio of assets to liabilities." This financial imbalance hindered potential acquisition deals.

5. Market Competition and Fatigue:

   The competitive landscape and investor fatigue in the plant-based and cell-based meat sectors added to New Age Eats' challenges. Spears reflected, "There was fatigue among investors and consumers in the plant-based and cell-based meat sectors." This market saturation made it harder for the company to stand out and secure necessary funding.

Lessons Learned from New Age Eats's Failure

• Regulatory Preparedness: Anticipate and navigate regulatory challenges early to avoid delays in bringing products to market.
• Financial Resilience: Ensure diverse funding sources to withstand capital market fluctuations and maintain operational stability.
• Cost Management: Balance innovation with cost-efficiency to manage high development expenses and long timelines.
• Asset-Liability Balance: Maintain a favorable asset-to-liability ratio to attract potential buyers and investors.
• Market Differentiation: Stand out in competitive markets by continuously innovating and addressing consumer fatigue.

We Shut Down Startups

New Age Eats's journey underscores the complexities and challenges startups face, from regulatory hurdles to financial instability. If you're navigating similar difficulties, Sunset can help you manage the legal, tax, and operational burdens of winding down your startup.

Don't let the stress of shutting down overwhelm you. Book a demo with Sunset today to smoothly transition to your next venture.